Manchester Airport Grp Funding PLC Annual Financial Report (3980E)

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RNS Number : 3980E

Manchester Airport Grp Funding PLC

04 July 2019

Issuer: Manchester Airport Group Funding PLC

Date: 4 July 2019

Manchester Airport Group Funding PLC

Company No. 8826541

Annual Results

The Issuer's parent, Manchester Airport Group Investments Limited ("MAGIL"), today publishes its Annual Report and consolidated financial statements for the year ended 31 March 2019.

MAGIL's parent, Manchester Airports Holdings Limited ("MAHL"), today also publishes its Annual Report and consolidated financial statements for the year ended 31 March 2019.

The Annual Reports and consolidated financial statements for MAHL and MAGIL are available on MAHL's Investor Relations website at magairports.com/investor-relations.

Investor Presentation

A conference call to present the results to bondholders, bank lenders, rating agencies and credit analysts will be held on Thursday 4 July 2019 at 10.30 am (UK time). The call will be hosted by Neil Thompson, Chief Financial Officer, and Andrew Cowan, Chief Executive Officer for Manchester Airport.

Dial-in details for the call are: UK local/standard international: [phone]. Participant PIN code: 6223569.

The presentation can be viewed online during the event by using the link: http://view-w.tv/755-1197-21822/en

MAGIL results for the 12 months ended 31 March 2019

MAGIL has delivered solid financial performance in the 12 months ended 31 March 2019, continuing the Group's growth delivered over the past few years despite challenges presented by last year's Monarch failure, together with air traffic and pilot strikes during the period. This has been driven by continued route development, successful backfill of routes to fill the gap left by Monarch, increased focus on digital engagement with retail and car park customers, and targeted investment to support volume growth and customer service.

 
 Key Financials            12 months ended   12 months ended   Change (%) 
                             31 March 2019     31 March 2018 
                                    (GBPm)           (GBPm)* 
------------------------  ----------------  ----------------  ----------- 
 Revenue                             879.1             814.3        +8.0% 
 Adjusted EBITDA**                   381.8             360.0        +6.1% 
 Operating profit 
  (before significant 
  items)                             229.4             217.1        +5.7% 
 Result from Operations              218.5             208.5        +4.8% 
------------------------  ----------------  ----------------  ----------- 
 
 
 
 Passengers         12 months ended   12 months ended   Change (%) 
                      31 March 2019     31 March 2018 
                                (m)              (m)* 
-----------------  ----------------  ----------------  ----------- 
 Manchester                    28.6              27.9        +2.5% 
 London Stansted               28.4              26.1        +8.8% 
 East Midlands                  4.9               4.9         0.0% 
 Total                         61.8              58.9        +4.9% 
-----------------  ----------------  ----------------  ----------- 
 

* On 5 December 2017 MAG entered into an agreement to sell its entire shareholdings in Bournemouth International Airport Limited and its subsidiaries to Regional and City Airports Holdings Limited, a subsidiary of Rigby Group PLC. The results and passenger numbers for 2018 for Bournemouth have been excluded from the tables above.

**Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, gains and losses on sales and valuation of investment properties, and significant items

Highlights

-- Passenger numbers increased to 61.8m (+4.9%), driven by record numbers at London Stansted Airport ("STN") (+8.8% to 28.4m). Manchester Airport ("MAN") also achieved record numbers in its 80(th) year of operation with solid growth (2.5% to 28.6m) as the airport successfully backfilled the capacity previously operated by Monarch.

-- Continued expansion of the route network with important extensions operating and/or announced to short-haul and long-haul destinations including Emirates launching a daily service from STN to Dubai and new destinations from MAN including Addis Ababa and Los Angeles. New short-haul routes and increased frequencies from MAG airports include the popular cities and resorts of Barcelona, Paris, Bordeaux, Faro, Vienna, Crete and St Petersburg. During the year easyJet added an additional five based aircraft at MAN and Jet2.com increased its based fleet at STN from seven to twelve.

-- The growth in passenger numbers combined with commercial yield improvements has translated into a strong set of financial results - Adjusted EBITDA** up by GBP21.8 million (or 6.1%) from GBP360.0 million to GBP381.8 million. The combination of the backfill of Monarch passengers, air traffic control strikes, and pilot strikes is estimated to have had a circa 3% drag on Adjusted EBITDA** growth across the Group.

-- Manchester Airport Transformation Programme has been under construction since November 2017, with work on target in terms of both cost and schedule. Manchester Airport Transformation Programme is the largest ever private sector investment in the North West. The Transformation Programme aims to allow the airport to continue to grow and provide airlines and passengers with the latest technology to improve the airport experience. The first major phase of the transformation programme was completed in April 2019 with the opening of a new pier and new multi-storey car park adjacent to Terminal 2. The Terminal 2 extension is due to be operational in Spring 2020.

-- Other investment includes: continued development of the Group's car park estate; improvements to the Group's IT capabilities; and design costs and the initial phase of new facilities at STN, which will enhance the overall passenger experience and provide the airport with the terminal infrastructure it needs in order to enable it to continue to grow.

-- STN has grown by over 60% since we acquired the airport in 2013 and remains well-placed to absorb future growth in London's aviation demand prior to any new runway being built at London Heathrow. The Stansted Transformation Programme (STP) started in 2018 and is an extensive programme of work that is being delivered to enable STN to make best use of its existing capacity and create greater choice and better service for its passengers. The next phase will involve the completion of new aircraft stands, new check-in desks, additional parking and refining the design options for the final design and phasing of the Arrivals Terminal building.

-- As at 31 March 2019, the Group's total listed bonds in issue was GBP1,110 million. Together with the GBP500 million revolving credit facility and a GBP60 million liquidity facility (both maturing June 2023), these facilities provide for a long-term stable funding platform ensuring the Group has sufficient liquidity to continue to invest in the asset base and fund future growth. In December 2018 MAGIL's parent, MAHL completed the execution of a GBP350 million loan facility with shareholders, through its subsidiary Manchester Airport Finance Holdings Limited, providing further support from shareholders towards the Group's investment plans.

-- In April 2019 the Group increased the size of the Liquidity Facility from GBP60 million to GBP90 million in anticipation of future debt issuance. In May 2019 MAGIL issued a GBP350 million 25 year bond with a coupon of 2.875%, listed on the London Stock Exchange.

-- Strong trading performance, combined with a prudent financing policy, underpins stable financial leverage (3.2x net debt to EBITDA).

-- An interim dividend of GBP110.7 million was paid in July 2018 by MAHL in respect of the full year ended 31 March 2018. An interim dividend of GBP64.0 million was paid in December 2018, and a final dividend of GBP128.0m will be paid in July 2019, making a total dividend of GBP192.0 million in respect of the full year ended 31 March 2019. Dividends paid by MAHL are funded via Distributions from MAGIL.

Note on MAGIL Results

A reconciliation between the financial results of MAGIL and MAHL is available in the appendix of the Investor Presentation, which is available on MAHL's Investor Relations website at magairports.com/investor-relations.

Enquiries:

   Investor Relations                                               [e-mail] 
   MAG Press Office                                                [e-mail] 

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July 04, 2019 02:00 ET (06:00 GMT)